We kicked off the day with S&P Global Manufacturing PMI Final 8:45 A.M., ISM Manufacturing PMI, ISM Manufacturing Employment, Construction Spending MoM, ISM Manufacturing New Orders, and ISM Manufacturing Prices at 9:00 A.M. Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Bostic Speech at 11:30 A.M., Loan Officer Survey at 1:00 P.M., Treasury Refunding Financing Estimates, Cotton System, Fats & Oils, and Grain Crushings at 2:00 P.M., and Fed Musalem Speech at 5:30 P.M.The commitment of Traders report showed another week of large fund buying in the principal ag markets in the week ending Jan 28. Funds were buyers in corn, soybean, soybean meal, soybean oil, MN wheat, and live cattle markets. Funds were net sellers for the week in Chicago wheat, KC wheat, lean hogs, and feeder cattle. Funds were long in 6 of the 10 principal ag markets, with the largest position in the corn market. Across, the 10 markets listed, funds bought 65,118 contracts, marking the 5^th consecutive week of buying, lifting the combined net long position to 469,009 contracts – the largest net long managed money position since February 2023.Photo by Jesse Gardner on Unsplash
US Weather UpdateEastern Midwest Stays Wet; Relative Warmth Blankets Central US:The Central US weather forecast keeps an active pattern of rain/snow east of the Mississippi River Feb 6-10. This will ultimately work to eliminate drought/abnormal dryness from northern IL, MI, and pockets of the Southeast. Temps are forecast at or above average into Feb 10^th . Max temps this weekend reach into the 50’s across the S Plains and S Midwest. The EU model’s latest 10-day precipitation forecast, shows potentially rain/heavy snow favoring KY and the southern Midwest. The remainder of the Central US will be dry. Dryness issues today remain confined to NE and SD but regular moisture will be needed across the southern and western Plains by March. Ag Resources (ARC) notes have been recorded across TX, W OK, KS, and NE since Dec 1^st at just 0.3”. There is no concern today, but rain will be needed in spring to rebuild soil moisture ahead of the growing season.
South American Forecast Consistent into Mid Feb; Drought Risk Favors N Argentina, Paraguay, & Far South Brazil:The major forecasting models agree that meaningful showers will resume Mato Grosso & Goias in N Brazil this weekend and early next week. Confidence is rising with respect to welcomed rainfall of 1-3” in Buenos Aires Feb 4-6, but the remainder of Argentina stays warm/arid nearby. Heavy rain in N Brazil will challenge defoliation efforts and harvest progress. Still, new South American production risk are confined to N Argentina, Paraguay, and Rio Grande do Sul in S Brazil – where drought intensifies for another 10-15 days.
CBOT Corn Futures Retreat on Promised Tariffs Against Mexico/Canada/China:How quickly each will retaliate against the US in response to Trump’s tariffs is unknown. Mexican President Sheinbaum indicated that she would keep a cool head. The retaliation action and goods targeted will be key as Trump foes ahead with tariffs at midnight. This week’s corn export inspections are forecast at 645,000 MT (25-28 MBU). That would be down 48% from the previous week and a 20-week low. This week’s ship lineup is 1.271 MMT (50 MBU). The US January Census exports are estimated at 5.91 MMT (233 MBU). In the January WASDE, the USDA lowered the projection of US corn exports by 25 MBU to 2,292 MBU. ARC expects final exports to be 75 MBU lower than WASDE at 2,375 Mil BU based on new tariffs from President Trump. Managed money increased their net corn long position to 350,271 contracts, 50,000 from the historical high 400,000 contracts. The massive considerable speculative length will produce considerable forward corn price volatility. There is still time to talk turkey before the final buzzer goes off at midnight. As Kevin O’Leary said, “in chaos there’s opportunity.”More By This Author:Shot Clock Running On Last Minute Delay on Tariffs – The Corn & Ethanol ReportEnd Of Month/Week-South American Weather Vs. Upside Momentum – The Corn & Ethanol ReportBulls Are Back In Town In Early Trade. The Corn & Ethanol Report